To sell, or not to sell?

March 24, 2020, 3:37 PM · Is this a good time to sell collectible instruments and bows due to the stock markets rapid decline? Or, the opposite? I think that I have read that violins pretty much kept their value during the Great Depression, but I am not an expert so do not know.

Replies (33)

Edited: March 24, 2020, 4:08 PM · My question to you would be, who has the money right now to buy such an instrument? Every working musician that I know of is hurting. I have personally lost at least two thousand dollars of upcoming expected income and that does not include any possible future disruption to my SAS salary.

Editing to add that I would assume potential investors have also been hurt by the stock market drop.

Edited: March 24, 2020, 4:13 PM · Probably not at this moment.

If you can watch what happens at Tarisio or other auction prices in the near future, you might get a better idea which direction things are moving.

I just googled the question and got this:

"Just prior to the 1929 crash, Stradivari violins such as the “Jansa” sold for $23,000, the “Artot” for $27,000, and the “Titian” for $30,000. In the midst of the Great Depression, prices fell to about one-tenth their pre-Depression levels; for example, the “Portuguese” Strad sold for £2,300 in 1933."

This is also a unique time.

Edited: March 24, 2020, 5:53 PM · Not being an expert has never stopped me from answering. Violins seem like a particularly illiquid commodity. Good luck selling in the best of times, but add quarantines in and you've eliminated the buyers that are going to be testing them out - Or do you really want to be shipping stuff around right now? And then add people's financial fears and uncertainties, and you are looking at a market without many buyers. So if you really need the cash soon, and press forward and want to sell in this kind of financial market, because of the lack of demand, you may have to take a big hit. Does that mean that your instrument has really depreciated? I wouldn't think so, but I don't know how the economists would see that.

If you believe that liquidity is the main factor affecting prices, then it makes sense to wait it out until people get their finances straightened out and feel comfortable spending on luxury items again. If you believe that there is something about this crash that actually has relevance to demand for violins (makers for competitive quality violins have all gone out of business, the rich have permanently lost their money, this epidemic has permanently reoriented parents to enroll their kids in finance competitions instead of violin competitions, parents start buying all their kids turntables instead of string instruments), then perhaps you are not in a liquidity crisis, and instead there has been a fundamental reorientation of the market and the value of your instrument is more permanently affected.

And then if you have a really big name instrument that is sought by art collectors instead of players to be locked in a vault as part of some kind of byzantine tax evasion scheme, then your guess is as good as mine, since we've really entered the casino at that point.

I would think it's a great time to be in the market for a new old violin or a Picasso or something.

March 24, 2020, 5:15 PM · There is a "cash crunch " happening. Even bonds are selling off.
March 24, 2020, 6:15 PM · In times like these, the big money boys (think Mr. Potter from It's a Wonderful Life) are buying assets for pennies on the dollar from people who need to raise cash. If you don't need to raise cash to pay your bills, don't sell your precious assets to Mr. Potter!
Edited: March 24, 2020, 7:23 PM · A lot of money is moving out of the stock market. Interest rate being so low, there is no good place to go. Bonds? Gold? real estate? There are no good options.

I would not be surprised those (whose basic needs are met) who are looking for a place to park their cash may consider alternative markets (arts, instruments, etc.)

Edit to add: Mary Ellen is right. These potential buyers would not be professional musicians.

Edit to add as well: People who provide liquidity (e.g. Mr Potter) in times like this are actually meeting critical needs!

Edited: March 24, 2020, 7:25 PM · It is an illiquid asset, and there are certainly going to be distressed sellers.

On the other hand, many items will be so far beyond the purchasing power of professional musicians that they will have their own little ecosystem of enthusiasts. You might see some who have kept their wits and fortunes jumping in to this sort of asset just because they will never be bothered by actually seeing fluctuating prices. Also, a lot of the new money chasing this stuff is from China, and they may well have people with a lot to spend even now.

No hard information, though. Isn't Tarisio doing a sale in London now? Should be some data on the more obvious commodities in that one. A related but not identical category would be fine wine. There are regular auctions in that market, and the Chinese have been big influences on prices, especially in Burgundies.

Edit: Tarisio London just finished. It's always hard to know how good the items are, but there was one "fine Sartory" that got the high end of its estimates, and two more ordinary ones that didn't sell. A "good" Tubbs was at the low end of its range. Overall, a fair number of things didn't move. But whether that was opportunists trying to unload junk or buyers just sitting on their hands I do not know.

March 24, 2020, 7:18 PM · I wouldn’t sell right now unless it was an absolute necessity. I don’t know what the prices at name auctions like Tarisio will do but looking at the mid to upper range of eBay, say $1500 to $15000, it seems prices are down about 25%
March 24, 2020, 7:55 PM · It’s a buyer’s market right now. Shops are closed all over the place and makers are hit hard, especially in Italy. With people worried about going out, it’s difficult for sellers to make sales, and that’s not counting the people in places that are under shelter-in-place orders.

If you’re able to do the legwork to find a buyer, there’s no reason not to do so, but it’s likely to be a lot harder at the moment.

Edited: March 24, 2020, 8:26 PM · A frequent poster here, who is a renowned violin maker too, mentioned a few days ago that he had some cancellations from his client wait list.
March 24, 2020, 8:51 PM · Honestly, there's been a slowly expanding bubble in the violin world going on for a while now. It's got to pop at some point. I mean 20 years ago, I could get a professional grade violin for around 10-20k. Now? 50k or more. But wages for musicians have been stagnant, or even less. Fewer buyers + inflated price is an unsustainable place to be if you're holding onto an asset.

If you have a chance to sell an instrument at a profit, and will need that money in the next few years, you should probably go ahead and cash in.

Conversely, if you don't anticipate needing money for 10+ years, then hold on.

March 24, 2020, 9:11 PM · Maybe I can sneak a visit to my violin shop and get a steal...
March 24, 2020, 9:39 PM · I was seriously considering pulling money out of the stock market and parking it in a great bow. My timing was off. Market crashed faster and harder than I could manage it.
Edited: March 25, 2020, 9:14 AM · I'd consider it, Bruce. If there's one thing investors universally hate, it's cash. They want the companies they invest in to have cash, but they loathe it as part of their own portfolios. Mutual funds tout the fact that they're fully invested. I'm grateful that my approach is balanced -- I have my retirement in equity funds, but a significant portion of our family savings is in CDs. 2% is looking pretty damned good these days.

Whether there is a violinist who will buy your Strad is irrelevant. These days they are purchased mostly by robber barons and private foundations.

March 25, 2020, 12:55 AM · Maybe you should invest in funeral parlours.
March 25, 2020, 4:32 AM · I would only sell if i were completely broke and there's no other way to get money.
Edited: March 25, 2020, 9:16 AM · Gordon that's a morbid joke, but the grim fact is that the big brokerage firms are busting their butts to find investment strategies that might profit from doom. The problem is that most of the firms that might be in the black don't have enough capitalization. You just can't buy enough shares of Medtronic to make up for all the GE, Ford, and GM that you're trying to dump. Even 3M -- the leading maker of N95 masks -- is way down because that's a company with a very diverse product line.
March 25, 2020, 9:49 AM · Clorox (NYSE:CLX) is doing great. Just saying.
Edited: March 25, 2020, 11:03 AM · Where to invest your money in times of hardship? Not a problem that many in the music game suffer from over here.
Edited: March 25, 2020, 12:54 PM · It might be a good time to sell in the short term if inflation starts to kick in later due to additional stimulus spending from central banks in the US and Europe. If investors cannot counter the inflationary effects through increased returns on stocks or real estate, then you could see a global economic recession, and perhaps a prolonged one since some central banks (US, Germany) cannot cut short term rates much further at this point in time to help stimulate the economy.

On a side note, a valuable Stradivarius was sold be WE Hill back in 1981 for a record price at that time. The US and Canada were about to enter a recession in part triggered by extremely high short-term interest rates. The buyer of this violin was from Singapore, which was experiencing significant economic growth at that time. But since today's world and economies though are much more interconnected and dependent, a downturn could impact multiple countries/trading zones.

March 25, 2020, 9:34 PM · Although I don’t think value for violins will drop because of the current conditions, I do believe that demand will be lower for a while. Much of this is because it’s simply harder to visit shops and auction houses with travel restrictions in place. Out of desperation, some are already selling instruments below value. Those who aren’t desperate to sell can afford to ask regular prices.
March 26, 2020, 11:46 PM · To buy or sell is a matter completely up to the owner. Right now musicians that have lost jobs or have had canceled seasons won't be looking to buy, I've had some returns happen when the shelters in place order were announced.

However, those in sectors that have stability it surely may be looking to find a nice instrument; especially now that many are working from home or families with children that are playing have more time to practice! The issue is consigning at the moment is impossible with the closing of non-essential businesses.

I can say that if those that are looking for instruments, you could perhaps contact shops that ship on approval in the usa nationally. Now is a good time to try instruments in this manner. International shipments is on lockdown for the moment however.

March 27, 2020, 10:52 AM · You sell, and when the prices are low enough, I'll buy.
March 27, 2020, 2:09 PM · I’ve got 2 bottles of hand sanitizer and a family pack of toilet paper.:)
Edited: March 29, 2020, 4:25 AM · Best to do what I have done and put your violin buying and selling on hold until we weather this storm and come out the other side, certainly I would not do anything to risk more exposure to the virus in the interest of buying or selling what in this economy are non essential items!!
March 29, 2020, 3:29 AM · i actually put all my next violin money into the stock market last week when the market was near bottom. pretty sure you are not going to get your asking price if you decide to sell now.
March 29, 2020, 4:54 AM · @Andrew, it's interesting that you bring up the Titian Strad.

So, just before the 1929 crash it sold for $30,000. What makes it interesting is acording to research by a respected university, the price of a Golden Period Strad in 1960 was $30,000. So this means, roughly, that such an investment took 30 years to return to its original value.

March 29, 2020, 6:58 AM · There have been a few investment funds promoted to buy violins for financial gains. The studies they use are often very selective in the data chosen.
March 29, 2020, 8:24 AM · Kyle wrote, "...last week when the market was near bottom."

Sure about that?

March 29, 2020, 9:45 AM · I would predict the market will go much lower
March 29, 2020, 8:32 PM · Now there’s a bet we can track!
April 4, 2020, 10:26 PM · I have heard it from a dealer that prices are going lower right now on fine violins and bows. Whether this is due to the sellers desperate for cash selling off collectors instruments or dealers hurting for business is not something I can answer.

I'm in the market for a nice bow to replace my factory club, maybe a nice British or German antique. Hopefully I can find a great deal right now and also don't lose my job in the process.

@Lydia We will all try and fail to catch the falling knife of stock markets at least once. My new instrument cost me a not-insignificant portion of personal savings and I spent it right before the poo hit the fan. At least stock markets don't impact tone quality...

Edited: April 5, 2020, 4:15 AM · "prices are going lower right now on fine violins and bows"
I'm not surprised with people bidding 700 000 for a bow. If you watch those twoset videos filmed at Nippon Violin, you wonder how many people are only in it for the speculation.
But all antiques suffer from the same rollercoaster ride of trend.

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